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Data center REITs post strong performance gains and growing investor focus
In the first quarter of 2026, data center REITs grew year over year funds from operations by 29.4% and net operating income by 15.8%.
Data center REITs, which own and manage specialized facilities that support the IT infrastructure behind the modern economy, have drawn heightened investor attention, including more institutional participation through joint ventures for new development. Nareit describes these operators as best-in-class due to their sector specialization, operational experience, disciplined balance sheets, and access to cost-effective capital, with demand increasingly supported by cloud and AI inference workloads.
Nareit’s REIT Industry Tracker data for the first quarter of 2026 shows average year over year growth of 29.4% in funds from operations and 15.8% in net operating income for data center REITs. Nareit also points to a weak 2025 performance period of minus 14.2% as a buying opportunity for the largest actively managed real estate funds focused on REITs.
Investor allocation has also shifted toward the sector, with the Nareit Actively Managed Real Estate Fund Tracker indicating data centers saw the largest year over year gain in assets under management of 6.2%. That translated into the largest percentage share of index weight at 138% across REIT sectors, and through mid year 2026 data centers were among the top-performing REIT sectors at 33.2%.
Capital markets activity remains a key part of the story. Over the past 12 months, data center REITs issued $4.2 billion in unsecured debt and $5.3 billion in equity, including two new IPOs focused on the sector, while continuing to raise capital via joint ventures and other vehicles, Nareit said.